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HomeMy WebLinkAbout1991.0516.TCRM.Minutes TOWN OF FOUNTAIN HILLS
MINUTES OF THE REGULAR MEETING OP THE FOUNTAIN HILLS TOWN COUNCIL
MAY 16, 1991
A public meeting of the Fountain Hills Town Council was convened and called to
order by Mayor John Cutillo at 6:30 p.m. , Thursday, May 16, 1991, in the Fountain
Hills Unified School District Administration Building located at 14605 N. Del
Cambre Ave. , Fountain Hills, Arizona.
ROLL CALL — Following the pledge to the flag and the invocation by Reverend Glen
Atchinson of the Fountain Hills Presbyterian Church, roll call was taken.
Present for roll call were the following members of the Fountain Hills Town
Council: Mayor John Cutillo, Vice Mayor Frank Clark and Councilmembers Peg
Tibbetts, Charlie Fox, Wally Hudson and Bill O'Brien. Councilman Mike Minarsich
came in at 6:36 p.m. Also present were Town Manager Paul Nordin, Director of
Community Development Gary Jeppson, Director of Parks and Recreation Robin
Goodman, Town Attorney Bill Farrell, Nick Dotterman and Town Clerk Cassie Hansen.
AGENDA ITEM #2 — ACCEPTANCE OF THE MEETING MINUTES OF APRIL 16. 1991
Vice Mayor Clark made a MOTION to accept the meeting minutes of April 16, 1991.
SECONDED by Councilwoman Tibbetts and CARRIED unanimously.
AGENDA ITEM #3 — TOWN MANAGER'S REPORT
Town Manager Nordin stated that the first item on his agenda would be deferred
until later on the agenda when a Resolution concerning the Beeline Highway would
be addressed.
#3.B.1. Mr. Nordin addressed the liquor license application for Walgreens and
stated that staff recommended approval of the request.
Mayor Cutillo made a MOTION to approve the application for a liquor license for
Walgreens and Councilwoman Tibbetts SECONDED it. The motion CARRIED unanimously.
#3.B.2. Mr. Nordin addressed the next item of business, the special event
request by the Chamber of Commerce for a July 4 Celebration in the park. Mr.
Nordin stated that staff felt that all of the appropriate documents had been
obtained and everything was in order and recommended approval of the request.
Vice Mayor Clark made a MOTION to approve the request by the Chamber of Commerce
fora July 4 Celebration in the park and it was SECONDED by Councilman O'Brien.
Councilman Hudson asked if there had been any request for the sale of liquor at
the event and Ms. Hansen replied that there had not. The motion CARRIED
unanimously.
Town Council Regular Meeting Minutes 5/16/91
Page 1 of 8
AGENDA ITEM #4 - RESOLUTION 1991-30, RELATING TO THE ARIZONA CORPORATION
COMMISSION, THE RESIDENTIAL UTILITY CONSUMER OFFICE AND THE REQUEST BY CHAPARRAL
CITY WATER COMPANY FOR A WATER RATE INCREASE
Councilwoman Tibbetts declared a conflict of interest on agenda items four and
five and stated that she would not participate in the discussions. Mayor Cutillo
read the agenda item and turned the floor over to Councilman Hudson who, after
stating that he had written the resolution, read the document (a copy of the
resolution is in the packet that follows the minutes).
Councilman Hudson stated that he had read the resolution as a MOTION and Vice
Mayor Clark SECONDED the motion. Mayor Cutillo stated that he was opposed to the
resolution and could only see a disadvantage to re-opening the case. The Mayor
stated that he thought that RUCO would be given a chance to speak at the meeting
and that that should suffice. Councilman Hudson asked Mr. Nordin to explain what
RUCO was, what authority they had and who appointed the commissioners. Mr.
Nordin stated that RUCO started in 1983 and he quoted from the Arizona Revised
Statutes, Section A of Section 40-462, which stated that the Residential Utility
Consumer Office was established to represent the interests of residential utility
customers in regulatory proceedings involving public service corporations before
the Corporation Commission. Mr. Nordin read Section B that said the Governor
shall appoint the Director of the office pursuant to (the given section of the
Law), the Director serves at the pleasure of the Governor, the Director must
possess management administrative skills, etc. Mr. Nordin added that RUCO
represents the residential rate payers of the state in the proceedings in front
of the Arizona Corporation Commission, that this was their only function and that
they only participate in the cases where the Arizona Corporation Commission has
jurisdiction. Mr. Nordin said that RUCO had twelve staff persons. Councilman
Hudson stated that at a study session, people from RUCO had attended and informed
the attendees that they had made a mistake by not entering into this agreement
and that they wished that they had intervened. Councilman Hudson stated that to
intervene was their job and that they should have the hearing re-opened so that
RUCO would have the opportunity to proceed as they should. He added that that
was the purpose of his resolution. Vice Mayor Clark stated that he wanted to
make a statement in support of the resolution. Vice Mayor Clark said that the
Corporation Commission was charged with assuring that the water company received
a fair return on their assets and the rate payers are not overcharged. Vice
Mayor Clark stated that he had read the staff report and the transcripts of all
of the meetings, the Hearing Officer's recommendation and he felt that all three
of the Commissioners and the Hearing Officer were doing a very good job. Vice
Mayor Clark stated that, as the Hearing Officer had pointed out, the degree or
percentage of the C.A.P. capitalization had not received a proper or adequate
consideration. Therefore, if RUCO had the opportunity to intervene, they should
still be heard to insure that whatever the result would be, it would be a fair
one for all parties concerned. Councilman O'Brien said that back at the
beginning o.f the hearings, if the Hearing Officer had shown evidence that had
backed up the points considered, he would be satisfied and he also stated that
he was currently happy with the proposed settlement from the Hearing Officer.
Councilman O'Brien stated that he felt the re-opening of the case would have
absolutely no guarantee of a more favorable decision. Councilman Fox directed
Town Council Regular Meeting Minutes 5/16/91
Page 2 of 8
a question to Legal Counsel from the text of the resolution, in the next to the
last paragraph, "and allow RUCO to fully present options to the method of
handling C.A.P. costs in water rates used in Fountain Hills". He asked if the
Board would receive any documentation and were they allowed to use the
information in the document in making their final ruling. Mr. Farrell stated
that communication of that nature would be accepted by the Corporation Commission
but that their final order normally would be based on testimony and exhibits
given to them as part of the hearing process. Councilman Fox stated that he
tended to agree with the Mayor's statements and that the figures that were used
were high because they used six hundred building starts a year when, in
actuality, there had only been approximately one hundred starts for each of the
last two years. He said that that difference could dramatically effect the rate
that citizens would have to pay. Vice Mayor Clark stated that he felt that the
Council 's part in this situation was limited to trying to do what was possible
to assure that all the evidence was in and heard. Mayor Cutillo agreed stating
that the Council should feel fairly comfortable that that had happened. He
further stated that RUCO would be the first to admit that just because they felt
they had a case did not mean that they would win. The Mayor further stated that
one of the things that RUCO had left out of their proposal was the fact that
everyone was concerned with conservation of water and the environment and that
all of these things cost money. If the ground water could not be used, someone
had to pay for it and RUCO had not put that into their rate. Councilman Hudson
stated that there was never any guarantee of winning and all they were able to
do was take the avenues that were available and do the best that they could.
Councilman Minarsich stated that RUCO changed its mind too often, citing that the
previous Friday they had indicated to the Mayor that they supported the fifty-
fifty split only to say the following Monday they no longer supported it. He
continued by saying that he did not feel comfortable with voting for a resolution
that would give that organization the go ahead to represent Fountain Hills.
Councilman Minarsich stated that the next agenda item was the letter and even
though it accomplished the same thing, he felt that it was a more direct method
and that he would support the letter. Vice Mayor Clark stated that on Friday
afternoon RUCO did not say that they were in support of this, rather that their
initial reaction had been was that they would support it but that they wanted to
reserve comment until Monday afternoon when they would come out with their
official position. Richard Songer, from the public, stated that the evidence was
not all in and that there had not been any evidence presented by the rate payers
of Fountain Hills. Mr. Songer said he supported an earlier statement that the
Commission did not put any weight in letters but would pay attention to
interveners. Mr. Songer stated that RUCO did not get involved for the first two
and a half months, after the second hearing. Mayor Cutillo stated that the
Council was completely aware of everything that he had stated and that he saw no
advantage to re-opening the case. Mr. Songer interrupted and stated that he
would cite some advantages. Mr. Songer stated that originally MCO requested a
seventy-seven percent rate increase, to which he responded with a full page ad,
signed by eight hundred thirty people, and sent to the Corporation Commission.
Mr. Songer said that immediately after that, MCO's attorney and the Town staff 's
attorney started meetings and approximately three days before the hearing they
agreed to a forty percent increase. Mr. Songer stated that, by the second
hearing, the Fountain Hills Association of Property Owners and our representative
from the State got involved and the rate increase was then reduced to twenty-four
Town Council Regular Meeting Minutes 5/16/91
Page 3 of 8
percent. Mr. Songer said that MCO's intention was to get the book value up from
$2.5 million because they wanted to sell the water company to the Town of
Fountain Hills, however, the Corporation Commission thought they wanted the book
value up for a rate increase. Mr. Songer stated that rate increases were figured
by determining a book value by adding all the C.A.P. costs and the proposed rate
increase. This done, the book value had increased to $10.9 million which would
be the cost if the Town purchased the utility. Mayor Cutillo asked Mr. Farrell
to expound on the difference between buying the C.A.P. now or later and Mr.
Farrell replied that the book value was not what would be paid in a condemnation
or in a sale to a municipality. Mr. Farrell said that where book value was used
was in a sale of one private water company to another private water company
because they both would have depreciation tax advantage. He added that the Town
did not pay taxes nor could it take advantage of depreciation. Mr. Farrell
explained that when a water utility was condemned, the measure would be the cost
of the facility new less the depreciation and this was called the reconstruction
cost. Whether or not the Colorado River expansion was in the rate base would be
recaptured in some manner. Mr. Farrell said that in five years if it was to be
condemned, there would be expert testimony as to the cost of the plant at the
time of condemnation. It would be depreciated back to its present value giving
the figure the municipality would pay. The book value, therefore, would not be
a relevant issue in terms of what the Town would pay. Councilman O'Brien asked
how there would be any possibility of selling the company if the Federal
Government owned it. Councilman Fox stated that Mr. Songer had taken out a full
page ad on May 3, 1991, stating that the Town would have a four hundred thousand
dollar deficit at the end of the fiscal year. He then called on Mr. Nordin to
give the present approximate balance of the Town 's assets. Mr. Nordin replied
six hundred thirty-five thousand dollars, adding that all bills were current.
Mayor Cutillo called for a roll call vote and the results of the roll call vote
were as follows:
Mayor Cutillo nay
Councilman Hudson aye
Councilman O'Brien aye
Councilman Fox nay
Vice Mayor Clark aye
Councilman Minarsich nay
Councilwoman Tibbetts declared a conflict of interest and did not vote.
The motion was DEFEATED by a three to three vote.
AGENDA ITEM #5 - LETTER TO THE CITIZENS OF FOUNTAIN HILLS AND THE ARIZONA
CORPORATION COMMISSION REGARDING THE PROPOSED WATER RATE INCREASE.
Mr. Nordin said that the letter before the Council (a copy of the letter can be
found in the packet) indicated the appropriate position that had been taken by
the Town Council on the water rate increase and recommended approval of the
letter. Councilman Minarsich requested that Mr. Nordin read the letter for the
benefit of the public and he did so.
Town Council Regular Meeting Minutes 5/16/91
Page 4 of 8
Vice Mayor Clark made a MOTION to approve the letter for distribution, as stated,
to the citizens of Fountain Hills through the press and to the Arizona
Corporation Commission with a copy to R.U.C.O. Councilman Minarsich SECONDED the
motion. The motion CARRIED with four aye votes, Councilman Hudson voted nay and
Councilwoman Tibbetts declared a conflict of interest and did not vote.
AGENDA ITEM #6 - ACCEPTING THE REVISED AGREEMENT WITH THE ARIZONA MUNICIPAL RISK
RETENTION POOL INCLUDING THE ARTICLES OF INCORPORATION AND BYLAWS CHANGES
Councilman Hudson made a MOTION that the revised bylaws and articles of
incorporation be accepted. Councilman Fox SECONDED. The motion CARRIED
unanimously.
AGENDA ITEM #7 - RESOLUTION 1991-16, ADOPTING A CONSTRUCTION PEE SCHEDULE FOR
CONSTRUCTION PLAN REVIEWS
Mr. Jeppson indicated that the changes had been made that the Council had
requested.
Councilman Minarsich made a MOTION to adopt Resolution 1991-16 as submitted and
Councilwoman Tibbetts SECONDED the motion. The motion CARRIED unanimously.
• AGENDA ITEM #8 - RESOLUTION 1991-25, APPROVING THE APPLICATION FOR LAND AND WATER
CONSERVATION FUNDS FOR GOLDEN EAGLE PARK
Councilman Fox made a MOTION to accept Resolution 1991-25 as submitted and
Councilman Minarsich SECONDED the motion. Mayor Cutillo stated that he wanted
Ms. Goodman to address the Council and the public before a vote on the
resolution. Mr. Nordin introduced Robin Goodman to the public and turned the
floor over to her. Ms. Goodman stated that they were applying for a grant for
state funding for the twenty acre parcel. Ms. Goodman requested that no action
be taken on the resolution at the present time and that they would come back to
the Council some time in June. Councilman Minarsich withdrew his second and
Councilman Fox asked if passing the resolution was just doing it ahead of time
and could the same resolution be forwarded in June. Ms. Goodman stated that the
resolution required some additional wording and numbers. Councilman Fox withdrew
his motion. Mayor Cutillo TABLED the resolution for further review.
AGENDA ITEM #9 - RESOLUTION 1991-26, APPROVING THE PLANS. SPECIFICATIONS AND
ESTIMATES, AND DECLARING ITS .INTENTION TO ORDER THE IMPROVEMENT OF A PORTION OF
THE TOWN OF FOUNTAIN HILLS KNOWN AS THE LOS ALTOS HILLS IMPROVEMENT DISTRICT BY
THE CONSTRUCTION OF CERTAIN IMPROVEMENTS INCLUDING THE CONSTRUCTION. PAVING AND
LANDSCAPING OF CERTAIN ROADS AND DRAINAGE FACILITIES; ALL AS SHOWN ON THE PLANS;
DESIGNATING SUCH IMPROVEMENT AS THE LOS ALTOS HILLS IMPROVEMENT DISTRICT;
DETERMINING THAT IMPROVEMENT BONDS WILL BE ISSUED TO FINANCE THE COSTS AND
EXPENSES THEREOF AND DECLARING THE WORK OR IMPROVEMENT TO BE OF MORE THAN LOCAL
OR ORDINARY PUBLIC BENEFIT; AND THAT THE COSTS OF SAID WORK OR IMPROVEMENT WILL
Town Council Regular Meeting Minutes 5/16/91
Page 5 of 8
BE ASSESSED UPON THE LOS ALTOS HILLS IMPROVEMENT DISTRICT; AND PROVIDING THAT THE
PROPOSED WORK OR IMPROVEMENT WILL BE PERFORMED UNDER THE PROVISIONS OF 48-571
THROUGH 48-621 INCLUSIVE. ARIZONA REVISED STATUTES, AND ALL AMENDMENTS THERETO
Mayor Cutillo stated that he was of the understanding that Resolution 1991-26 was
going to be postponed to a future scheduled meeting. Mr. Farrell was called upon
to respond and Mr. John Gliege was introduced as the Town 's Bond Counsel for the
matter. Mr. Farrell stated that the topic would be postponed until the final set
of construction plans for the improvements were approved by the Town Engineer,
adding that the major item currently holding up the project was the approval from
the County Highway Department over the portions of the improvement district that
would be done on Shea Boulevard in the County. Mayor Cutillo reiterated that it
was the County that was holding up the project and Mr. Farrell said yes, it was.
Councilwoman Tibbetts stated that there were a number of legal exhibits that were
labelled exception and wanted to know what the exceptions included. Mr. Gliege
replied that these sections included the golf course which had been deleted in
the area to be assessed by the improvement district and the roadways that would
become part of the Town 's roadway system. Mr. Gliege stated that there would be
a better map provided which would show the exceptions on one sheet. Councilman
Hudson asked if the appraisal on the property had been received and Mr. Gliege
stated that he had received a copy, however, he had not reviewed it so he could
not comment on it. He did state that it was in substantial excess of the bond
that had been sought. Councilman Hudson stated that the bond issue should be
three to one and Mr. Gliege confirmed by stating that the appraisal was almost
four to one.
Councilwoman Tibbetts made a MOTION to table the resolution and Councilman Fox Nols)
SECONDED it. The motion CARRIED unanimously.
AGENDA ITEM #10 - RESOLUTION 1991-29. ABANDONING WHATEVER RIGHT. TITLE. OR
INTEREST IT HAS IN THAT CERTAIN PUBLIC UTILITY EASEMENT AND DRAINAGE EASEMENT
AFFECTING ALONG REAR OP LOT 6 IN BLOCK 9, OF PLAT 111, AS RECORDED IN BOOK 150
OF MAPS. PAGE 12 RECORDS OP MARICOPA COUNTY. ARIZONA
Mr. Jeppson stated that all of the utilities and adjacent property owners had
been contacted and that there were no objections.
Councilman Minarsich made a MOTION to adopt resolution 1991-29 as read and
Councilman O'Brien SECONDED. The motion CARRIED unanimously.
AGENDA ITEM #11 - ORDINANCE 91-08. AMENDING THE OFFICIAL ZONING ORDINANCE OP THE
TOWN OF FOUNTAIN HILLS AS AUTHORIZED IN ARTICLE XXXXI SECTION 31.1 OF THE ZONING
ORDINANCE FOR THE TOWN OF FOUNTAIN HILLS, AMENDING ARTICLE XVIII. SECTION 18.2,
PERTAINING TO THE PURPOSE OF THE C-1. NEIGHBORHOOD COMMERCIAL ZONING DISTRICT AND
SECTION 18.2. PERTAINING TO PERMITTED USES .IN THE C-1, NEIGHBORHOOD COMMERCIAL
ZONING DISTRICT
Mayor Cutillo made a MOTION to adopt ordinance 91-08 as written and Councilman
Minarsich SECONDED the motion. Steven Voss who worked for Larson and Associates
Town Council Regular Meeting Minutes 5/16/91
Page 6 of 8
was in the audience and he introduced Mr. and Mrs. Paul Messinger, who were the
owners of Messinger. Mortuary, Mr. Jim Aker who worked for the Messingers and Mr.
Doug Sydnor, the Architect for the project. Mr. Voss stated that they were there
to speak in favor of the amendment to facilitate the approval of the next item
on the agenda. Mr. Voss said that Messinger Chapel proposed the use within the
C-1 district and that they would consider it to be a compatible use with the
adjacent residential and commercial districts. Mr. Voss stated that the facility
had been designed to integrate fully with the natural landscape and vegetation
adjacent to the building. Mr. Voss also said that they would withdraw the next
agenda item, which was their case, if item number eleven was approved.
Councilman Hudson asked if Mr. Voss ' client owned the property and Mr. Voss
stated that the property was in escrow and they did not own it at that time. The
motion CARRIED unanimously.
AGENDA ITEM #1.2 - CONSIDER CASE NUMBER Z91-002. PLAT 302, BLOCK 5. LOTS 4 AND 5
REZONE FROM "C-I" TO "C-2"
Mayor Cutillo stated that it was his understanding that this agenda item was
withdrawn with the passage of agenda item number 11 and no action was required.
AGENDA ITEM #13 - RESOLUTION 1991-31. RELATING TO THE BEELINE HIGHWAY'S (ROUTE
87) PLACEMENT ON THE ARIZONA DEPARTMENT OP TRANSPORTATION'S 5-YEAR CONSTRUCTION
PROGRAM.
Mr. Nordin stated that the Arizona Department of Transportation planning
committee had met recently and discussed moving the Beeline project up. He
added, that in their final recommendation, they had said that the construction
should remain on the schedule for the year 1996. Mr. Nordin stated that the
Rssssssesolution 1991-31 would encourage the Arizona Department of Transportation
Board not to accept the recommendation from the planning committee, requesting
that it move the project to its original schedule of 1992 or sooner than 1996.
Mayor Cutillo made a MOTION to accept Resolution 1991-31 as written and
Councilman Pox SECONDED it, requesting that the Mayor inform the public of the
potential meetings with the State. Mayor Cutillo stated that he would be a
member of a group, including the Chairman of the Board of the Arizona Department
' of Transportation, Mr. Chavez, a member of the Arizona Department of
Transportation staff, Mr. Reed, a member of the Governor's staff and
Representative Steffey. Mayor Cutillo said that the committee would meet once
a month and would keep current on the progress of Beeline. The motion CARRIED
unanimously.
AGENDA ITEM #14 - CALL TO THE PUBLIC
Mayor Cutillo made the call to the public and Mr. Songer addressed the Council.
Mr. Songer asked Mr. Nordin where the six hundred thousand surplus dollars came
from and Mayor Cutillo stated that Mr. Nordin would address that question after
Town Council Regular Meeting Minutes 5/16/91
Page 7 of 8
the meeting was adjourned. Mr. Songer addressed Councilman Fox and questioned
*01;0)
the blue pamphlet which was published before incorporation which said that at the
end of the first fiscal year there would he a $2.1 million surplus. Mayor
Cutillo said that Councilman Fox could answer that question later if he so
desired.
AGENDA TTEM #15 - PURSUANT TO A.R.S. 38-431.03.A.3. VOTE TO GO INTO EXECUTIVE
SESSION TO DISCUSS AND/OR RECEIVE LEGAL ADVICE FROM THE ATTORNEY OR ATTORNEYS OF
THE PUBLIC BODY ON CONTRACT NEGOTIATIONS
Councilman Minarsich made a MOTION to go into Executive Session. SECONDED by
Councilman Fox and CARRIED unanimously.
At approximately 7:30 p.m. the Town Council went into Executive Session.
AGENDA ITEM #16 - RETURN TO REGULAR SESSION
The Town Council returned to Regular Session at approximately 8:25 p.m.
AGENDA ITEM #17 - ADJOURNMENT
Councilman Minarsich made a MOTION to adjourn. SECONDED by Councilwoman Tibbetts
and CARRIED unanimously.
The Town Council adjourned at approximately 8:25 p.m.
TOWN OF FO i AI ,geL
H LL
By:
John M. Cu .illo, Mayor
ATTEST: aAkA.
Cassiie B. Hansen, Town Clerk
CERTI Fl CAT TOiJ
I hereby certify that the foregoing minutes are a true and correct copy of the
minutes of the Regular Meeting held by the Town Council of Fountain Hills on the
16th day of May 1991 . I further certify that the meeting was duly called and
that a quorum was present.
DATED this I b rY_- day of July 1991 .
/11V1.4A-A.)
Cassie B. Hansen, Town Clerk
Town Council Regular Meeting Minutes 5/16/91
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